FACT JV with Adi Group of Syria

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Mar 15, 2007, 07.00 PM IST

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KOCHI: The Union Ministry of Chemicals and Fertilisers will form a consortium of Indian companies including FACT for taking 50 % equity in the proposed Rs 3000 crore joint venture urea plant in Egypt with Syria-based Adi Group.

A ministerial team along with the company heads will leave for Egypt by the end of this month for discussion on the allocation of natural gas for the project. The fertilizer unit, with a capacity to produce 10 lakh tonne of urea, will use natural gas available in Egypt as feed stock. A formal agreement on the project including the price of the gas will be signed between the Indian and Egyptian governments after the meeting, FACT director (technical) George Sleeba said.

The proposal had initially come to FACT in response to the advertisement for joint venture projects. But the government insisted on going with two companies as the Indian partners going by the precedence of Iffco-Kribhco fertilizer joint venture with Oman. The other Indian partner is most likely to be National Fertilisers Ltd. (NFL), whose CMD G.S.Mangat is holding additional charge as the FACT.

Of the Rs 1000 crore equity of the project, Indian partners will have 50% stake which may be shared in the ratio 15:35 between FACT and NFL. The FACT's share will be in the form of services, namely technical expertise and management of the unit. The entire urea production will be bought back by Indian companies for distribution in the country.

At present India is producing 200 lakh tones of urea per year. There is a demand for 50 lakh tones more, which is now imported. This shortage is likely to go up to 80 lakh tones by 2010. NFL is currently manufacturing 33 lakh tones of urea while FACT used to produce 3 lakh tones. The urea plant of FACT was closed down four years ago as it became unviable with rising prices of feedstock naphtha.